James P. Barrow
Founding Partner and Principal
Barrow, Hanley, Mewhinney & Strauss, Inc.
James Barrow's value manager philosophy has never looked better.
Barrow has been portfolio manager for Vanguard's Windsor II and Diversified Value funds since their inceptions in 1985 and 1999, respectively, and for the Vanguard Selected Value Fund since 1999. His performance over the past two years probably has Vanguard's investors relieved that he's managing their money.
Despite being one of the largest funds with more than $22 billion in assets, Vanguard Windsor II has produced market-beating results, including a 16.9 percent gain in 2000, a 3.4 percent loss in 2001 and a 5.1 percent loss so far this year, according to Morningstar.com. Windsor II's annual returns have been among the top 30 for five of the past seven years in Morningstar's Large-Cap Value category.
The Vanguard Selected Value Fund recently has done almost as well compared to its peers. The mid-cap fund has gained 4.93 percent so far this year, better than all but seven funds in the category.
Barrow, Hanley, Mewhinney & Strauss provides investment advisory services. James Barrow has worked in the investment management industry for nearly 40 years, working as a Securities Analyst and Portfolio Manager for several major institutions including Citizens & Southern Bank of South Carolina, Atlantic Richfield and Reliance Insurance. In 1973 he joined Republic National Bank of Dallas as a Portfolio Manager. He later was placed in charge of the Employee Benefit Portfolio Group and was a member of the Trust Investment Committee until the founding of his firm, Barrow, Hanley, Mewhinney & Strauss, in 1979. He is a graduate of the University of South Carolina.
Click here to read Chanos' testimony before Congress.
In a niche where many top players avoid the spotlight, James Chanos over the past 20 years has become one of Wall Street's short-selling legends, though he retains some of his industry's reclusiveness -- he refused to provide a photo for this Web site, and wouldn't let Wall $treet Week with FORTUNE display an address for his company, Kynikos Associates, though it can be found easily through a Web search engine.
Chanos earned his reputation by correctly anticipating several business debacles in the 1980s, starting with Baldwin-United in 1982. The bull market crushed Kynikos in the late 1990s, but time proved Chanos correct as the bubbles popped for Internet, technology and communications stocks. Kynikos' Ursus Partners hedge fund rolled up gains of 47.4 percent in 2000 and 18.2 percent in 2001 while major indices wallowed in losses.
Lately, Chanos has regained his position as a media star, thanks to his prescience on Enron. He started shorting Enron in late 2000, almost a year before everyone else--"the market call of the decade, if not the past 50 years" Barron's gushed in January. Earlier this year, he testified before the House of Representatives during Congress' Enron investigations.
His public record of picks since Enron has been mixed, at least on the surface. Since Barron's profile of Chanos appeared five months ago, three of the five companies he named as short picks have outperformed major indices.
But Chanos also tabbed two massive losers. Credit card issuer Metris has fallen 48.8 percent since the Barron's article. And then there's a pick that will surely burnish Chanos' reputation: Tyco, a stock he began shorting when it was in the high 50s in late 2001, and down 68 percent year-to-date, as of Monday.
Through investment partnerships, corporations and managed accounts, both domestic and offshore, Kynikos Associates maintains a portfolio of overpriced securities for clients.
Kynikos Associates through the domestic Ursus Partners fund as well as Ursus International for international clients, provides the investment strategy of profiting from unhedged short selling of overvalued securities. Mr. Chanos also manages the fully hedged Beta Hedge and Beta Hedge International funds for domestic and offshore investors. Both the Ursus and Beta Hedge fund families profit from the unusually high alphas found on the short side of the U.S. equity market.
Born and raised in Milwaukee, Wisconsin, Chanos graduated from Yale University in 1980 and presently lives in New York with his wife and four children. Between graduation and starting his own firm, Mr. Chanos gained financial experience as an analyst with Paine Webber, Gilford Securities and Deutsche Bank where his specialty was finding and evaluating overpriced securities.